Grid-scale
Brazil could add 18.2 GW of energy storage by 2040
That figure would require incentives, regulation and ambition. A study by Clean Energy Latin America (CELA) estimated the Brazilian storage market should grow at least 12.8% annually through 2040, reaching a cumulative 7.2 GW, excluding client-side, ‘behind-the-meter’ installations.
By
Livia Neves
Nov 11, 2024
Grid-scale
Projects & Applications
Isa Cteep's energy storage battery system, in Registro, São Paulo. | Image: Disclosure Isa Cteep
Brazilian consultant CELA has said the inclusion of electrical energy storage systems in a federal government capacity reserve auction which could take place in June 2025 could reinforce Brazil’s National Interconnected System (SIN) grid.
“By allowing the storage of renewable energy generated during times of lower demand, we will have a significant reduction in the effects of recurring cuts in solar and wind generation, the so-called constrained-off (or curtailment), in addition to increasing the system’s operational flexibility ,” said CELA Chief Executive Officer Camila Ramos. “At the same time, the insertion of storage systems accelerates technical-regulatory discussions, drives innovation in the sector, and fosters the digitalization of the Brazilian electricity grid.”
The capacity auction would include contracts for energy storage projects with minimum power availability of 30 MW for the equivalent of four hours’ continuous dispatch per day in the electrical system, with a maximum of one daily charge and discharge cycle, at a time defined by the National System Operator (ONS).
CELA said the technical standards of the notice are being drafted but it is expected that successful bids will be determined by lowest prices and SIN grid capacity.
It is expected project operators would receive a monthly fixed payment, adjusted for inflation annually by Brazil’s consumer price index, with the possibility of additional revenue for grid ancillary services provided they do not hinder the delivery required by the capacity auction terms. The electricity supplied by storage facilities would be settled on Brazil’s short-term energy market and paid into the Power Account for Capacity Reserve. Contracted volumes of energy would be settled without price risk to the storage plant operator.
“In practice, the auction offers a model with an attractive risk-return ratio,” said CELA’s Ramos. “In addition to a fixed revenue model, indexed to inflation and without exposure to price risk, the auction establishes a four-year deadline for project execution. In this way, the [auction] winners will be able to choose the best time to purchase the systems, speculating on an additional drop in battery prices or accelerating implementation and anticipating fixed revenue (if they demonstrate technical and economic benefits to the SIN). If maintained in this way, this combination of factors can generate above-average returns.”
$12.5bn market
CELA has predicted the Brazilian energy storage systems market will grow 12.8% per year through 2040, with an increase of up to 7.2 GW of installed capacity during that period.
The analyst’s projections indicate the growth of batteries incorporated into the country’s electricity generation, transmission, and distribution infrastructure could generate more than $12.5 billion annually, under current regulations.
With the addition of adequate incentives, well-defined regulation, and established goals, that potential could be expanded beyond 7.2 GW to as much as 18.2 GW by 2040, without considering the potential of behind-the-meter energy storage.
From pv magazine Brasil.
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